what happens to founders after acquisition ?

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what happens to founders after acquisition ?

The fate of founders after an acquisition can vary depending on several factors, including:

• The terms of the acquisition deal: This will outline expectations for the founders’ role post-acquisition.
• The acquirer’s strategy for the acquired company: Do they want the founders to stay on and lead the team? Or do they have someone else in mind?
• The founders’ own desires: Are they interested in staying on with the new company, or are they ready to move on to new ventures?

Here are some of the common outcomes for founders after an acquisition:

• Retention: This is a frequent scenario where the acquirer wants the founders to stay on board. Their knowledge, experience, and leadership are valuable assets to ensure a smooth transition and continued success of the acquired company. They might retain their roles or take on new responsibilities within the larger organization.

• Exit: Some founders might choose to leave the company after the acquisition. This could be due to a desire to pursue new ventures, a lack of fit with the acquirer’s culture, or simply a need for a break. The acquisition deal might include financial incentives for them to depart.

• Advisory Role: Founders might transition to an advisory role, offering their expertise and guidance to the new leadership team without the day-to-day responsibilities of running the company.

• Earnout: In some cases, the founders’ compensation might be tied to the performance of the acquired company post-acquisition (earnout). This incentivizes them to stay on board and help achieve specific goals.

Here are some additional points to consider:

• Negotiation is Key: Founders should carefully negotiate the terms of the acquisition deal, especially regarding their post-acquisition role and compensation.

• Psychological Adjustment: Transitioning from founder to employee within a larger organization can be a psychological adjustment for some founders.

• Not Always Smooth Sailing: Unfortunately, not all acquisitions go smoothly. There can be clashes in culture, disagreements over strategy, and challenges integrating the acquired company. This can impact the founders’ experience post-acquisition.

Overall, there’s no one-size-fits-all answer to what happens to founders after an acquisition. The specific outcome depends on the circumstances surrounding the deal and the choices made by all parties involved.

https://www.businessinsider.com/what-happens-ceo-founder-company-acquired-2018-11?op=1

https://www.businessinsider.com/what-happens-ceo-founder-company-acquired-2018-11?op=1
When a Company Is Acquired, What Happens to the Founders?
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https://hbr.org/2022/11/what-founders-need-to-know-before-selling-their-startup

https://hbr.org/2022/11/what-founders-need-to-know-before-selling-their-startup
What Founders Need to Know Before Selling Their Startup
23 nov. 2022David Jegen November 23, 2022 Audshule/Getty Images Summary. In acquisitions, there are two types of leverage. The first is negotiating leverage, which determines who wins on deal-breaker points….

https://www.sciencedirect.com / science / article / pii / S0969593121001165

https://www.sciencedirect.com / science / article / pii / S0969593121001165
Founding entrepreneur’s dilemma: Stay or exit the firm following an …
1 févr. 2022After the acquisition, founding entrepreneurs with longer tenure tend to remain in the firm. • Compared to their North American counterparts, entrepreneurs residing in Europe and Asia show a higher propensity for remaining in their firms. Abstract

https://www.linkedin.com/pulse/satisfaction-after-acquisition-how-three-founders-navigated-bob-morse

https://www.linkedin.com/pulse/satisfaction-after-acquisition-how-three-founders-navigated-bob-morse
After the Sale: How Three Founders Navigated to Success on … – LinkedIn
I frequently hear stories of founder-led companies that are acquired in add-on acquisitions, and after the transaction, the founders themselves are basically tethered unhappily to some…

https://hbr.org/2017/03/surviving-ma

https://hbr.org/2017/03/surviving-ma
Your Company Just Got Bought Out. What Do You Do Next?
Mitchell Lee Marks, Philip Mirvis, and Ron Ashkenas From the Magazine (March-April 2017) Robert Samuel Hanson Summary. If your company is undergoing a merger or acquisition, you’re apt to feel…

https://versionone.vc/keep-founders-around-acqui-hire-era

https://versionone.vc/keep-founders-around-acqui-hire-era
How to keep founders around after an acquisition – Version One
In most cases, as Bloomberg detailed with Zynga, the founder leaves 1-2 years after acquisition. After all, someone founds a company because they want to be a leader, not a follower. Entrepreneurs have a difficult time when the acquiring company tries telling them how to run the business they have created and grown.

https://techcrunch.com/2022/02/04/after-the-acquisition-3-startup-founders-share-their-exit-experiences

After the acquisition: 3 startup executives share their exit experiences

After the acquisition: 3 startup executives share their exit …
4 févr. 2022In Part 1 of this series, we spoke to acquiring companies about the deal and how they integrate acquired firms. In Part 2, we talk to executives from the three companies that they bought.

https://aaronhall.com/insights/founders-guide-to-maximizing-acquisition-success

Founders’ Guide to Maximizing Acquisition Success

Founders’ Guide to Maximizing Acquisition Success
Key Takeaways Negotiating leverage is crucial in acquisitions as it determines deal-breaker points and the ability to win favorable terms. Founders often lack post-acquisition guidance, despite spending significant time with the acquirer, and need support during this phase.

https://www.inc.com/jeff-haden/the-entrepreneurs-journey-from-founder-to-acquisition.html

https://www.inc.com/jeff-haden/the-entrepreneurs-journey-from-founder-to-acquisition.html
From Founder to Employee: The Surprisingly Smooth Post-Acquisition …
A few go public. Some (even after a successful IPO) are acquired by other companies and their founders stay on to help continue what they started. That is the case for two entrepreneurs: Michael …

https://www.linkedin.com/pulse/startup-acquisition-pros-cons-founders-ready-sell-meyer-mba

https://www.linkedin.com/pulse/startup-acquisition-pros-cons-founders-ready-sell-meyer-mba
Startup Acquisition Pros and Cons for Founders Ready to Sell – LinkedIn
In some cases, you may even be able to negotiate what happens after the acquisition. For example, we know founders who have negotiated: Ongoing employment contracts for key employees lesoutrali bot